A Massachusetts inquiry into BankBoston Corp.'s mutual fund sales practices has highlighted the pitfalls banks face in selling investments.

A BankBoston spokeswoman confirmed Tuesday that the state's Division of Securities has requested documents involving BankBoston Investor Services. "We are not aware of any issues that would give rise to their review, but we are cooperating fully with them," she said.

The statement came after The Boston Globe reported that the regulator is looking into whether the bank's sales force has encouraged customers to move their investments from no-load mutual funds to funds and annuities that carry up-front sales charges. The Division of Securities declined to comment.

BankBoston is one of just a few banks that sell load-bearing funds alongside no-load funds. That approach could lead to inappropriate sales if brokers stand to earn more from selling a load fund over a no-load fund or vice-versa, industry experts say.

"Many banks have tried to solve this general problem by trying to level the playing field so the broker gets paid the same" regardless of whether they sell load or no-load products, said Kenneth Kehrer, a consultant in Princeton, N.J.

It's unclear if BankBoston sales representatives stand to earn more by selling loaded funds under bank compensation policy.

News of the probe came just days after Allen W. Croessmann, BankBoston's managing director of investment products and services, announced that he would retire at the end of this month for personal reasons after six years at the bank.

Karen Schwartzman, the spokeswoman for BankBoston, said yesterday that there is no connection between the departure of Mr. Croessmann, 52, and questions raised about the company's mutual fund sales practices.

"Allen made a personal decision to leave BankBoston, and his personal decision has nothing to do with whether or not BankBoston is the subject of a review by the securities division of the secretary of state," she said.

Observers described Mr. Croessmann as well-respected in the industry and said they doubted he would ultimately be linked to any wrongdoing.

"I'd be surprised if this leads to him," one said.

This is not the first time that bank brokerages have come under scrutiny for the fund sales practices.

At least five big banks have run into legal trouble over sales practices in recent years. One of them, NationsBank Corp. agreed this spring to pay federal regulators $7 million to settle allegations that its brokerage arm misled investors about the risks of certain mutual funds in 1993 and 1994.

That's on top of some $60 million the bank agreed to pay to settle two investor lawsuits, as well as more than $1 million in penalties imposed by regulators in Texas and Florida.

Michael Mayo, a banking analyst with Credit Suisse First Boston, said yesterday that bank executives told him that "some investors may have called a state governing body to complain about the way they were treated by BankBoston."

The bank's retail brokerage had mutual fund sales of $415 million and annuity sales of $42 million last year-sales that were about average for an institution its size, Mr. Kehrer said. Its proprietary fund family, the Boston 1784 Funds, has $9 billion of assets under management in 17 funds.

The bank is not known for having an exceptionally aggressive sales culture, Mr. Kehrer said.

Mr. Croessmann, founder of the 1784 Funds and of the bank's retail brokerage, said on Monday that "there's nothing sinister behind" his departure, calling his decision to leave "totally personal."

He could not be reached yesterday to comment on news of the probe.

Mr. Croessmann said that for six years he has commuted each week to his job in Boston from New Jersey, where his family lives.

"It's something I've thought about for a while and wanted to do because I'm a little tired," he said.

Kathleen McGillycuddy, executive director of treasury and Mr. Croessmann's supervisor, will take over his responsibilities, a bank spokeswoman said.

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